El Cerrito’s financial struggles are largely due to its escalating pension debt, linked to the California Public Employees’ Retirement System (CalPERS). This debt saw a 67% increase from fiscal year 2014-15 to 2019-20, reaching $65.8 million by June 2020 and soaring to $85 million by June 2023. High pension liabilities mean rising costs over time, impacting the city’s service delivery, especially during revenue downturns.
El Cerrito has more staff per capita than any neighboring city. Most notably, El Cerrito is smaller and has fewer people than Hercules, yet employs twice as many people.
The city’s pension debt continues to grow because of the seemingly excessive payroll, and it hasn’t set aside sufficient funds early on for future retirement benefits. Early investment of these funds would have yielded higher returns, easing the burden of benefit payments as employees retire. El Cerrito’s minimal investment in this area is deemed high-risk by state standards.
A significant factor in the rising pension costs is El Cerrito’s practice of paying only the minimum yearly amount as required by CalPERS actuaries. This amount covers current employee benefits and a fraction aimed at reducing the net pension liability. Despite these payments being structured to eliminate the liability in 20 years, just paying the minimum contributes little to reducing the debt shortly.
The structure of these pension payments resembles a home mortgage, where early payments mainly cover interest, barely reducing the principal owed. As employee salaries and payroll remain high, the minimum amount needed to manage these obligations will also rise. Fluctuations in investment returns, changes in staffing, and actuarial assumptions like life expectancy further impact the minimum contribution required by El Cerrito.
Here is how you can help:
- Share this post with other residents.
- Comment on the post
- Attend the monthly Financial Advisory Board meetings in person.
- Post on Next Door
- Voice your concerns with the Council.
- Council meetings are remote and in-person, but public comment is now limited to in-person attendees.
If you want to contact City Council Members or the City Managers, all their emails are below:
- Karen Pinkos-City Manager kpinkos@ci.el-cerrito.ca.us
- Councilperson Gabe Quinto gquinto@ci.el-cerrito.ca.us
- Councilperson Carolyn Wysinger cywysinger@ci.el-cerrito.ca.us
- Councilperson Tessa Rudnick trudnick@ci.el-cerrito.ca.us
- Mayor Lisa Motoyama lmotoyama@ci.el-cerrito.ca.us
- Councilperson Paul Fadelli pfadelli@ci.el-cerrito.ca.us
El Cerrito Committee for Responsible Government (ECCRG) 